As Market Starts to Turn
Despite the fact that the mortgage market remains highly competitive between lenders, the cracks in the ultra-low rates are starting to show. Lenders are leading the way in either scrapping low-rate products, or increasing the interest rate.
Rises across the board
Nationwide is just one of many lenders that have decided enough is enough of rock-bottom interest rates.
This is because “swap rates’, the rates at which lenders borrow money from each other, has increased in recent months.
Swap rates had been low from the start of 2016, but after the EU Referendum they fell sharply and didn’t pick up again in the months following.
This has been largely the reason everyone has been able to enjoy the low interest rates in previous months.
10-year Fixed Rate options
Nationwide have been one of the leaders to increase the rate on their 10-year Fixed-Rate mortgage, by 0.3 percentage points. Their cheapest 10-year Fix product now costs 2.99 percent, with a 40 percent deposit requirement. There is also a £999 fee attached to this product.
Skipton Building Society increased their rates last week by 0.37 percentage points and West Bromwich scrapped their 10-year Fixed-Rate product all together.
HSBC do still offer a competitive 10-year product for a 60 percent Loan to Value. Their rate remains at 2.40 percent, with zero fees.
How long will deals like this be available for though is the question?
If you are looking to fix your mortgage for a 10-year period, then it would be advisable to speak to a mortgage adviser as soon as possible. They can detail the options available to you.
Mortgage comparison
For example, comparing the Nationwide new 10-year fix with the HSBC current 10-year fix, shows a £7,000+ difference over the loan term, based on a £350,000 mortgage with a 40 percent deposit.
- Nationwide – £120,880, including fees
- HSBC – £113,150, zero fees
Act soon, as increasing swap rates will put pressure on lenders to increase the rates offers to consumers.
Speak to Chris about your mortgage
If you would like us to undertake a review of your current mortgage deal or you are thinking of purchasing in the near future and require funding, please contact Chris for a free, no obligation appraisal.
Tel: 01403 780 770